Confluence Partners Release VenuWorks Report

The Confluence Project Community Arts Center would realize positive operating balances of more than $100,000 in its first year of operations, with those positive operating balances growing steadily, according to a report prepared by VenuWorks Consulting of Ames, Iowa.

The VenuWorks report, co-commissioned by the Eau Claire Regional Arts Council and Haymarket Concepts, LLC, details the business and operations plan, including pro forma budget, for the Community Arts Center that would be shared jointly by the Eau Claire Community and University of Wisconsin-Eau Claire.

The first year of full operation the Community Arts Center is projected to host 181 events generating 646 event days and welcome over 176,400 patrons.

First-year-end revenues from all sources in excess of expenses is projected at $100,773. The positive operating balances are after annual contributions of $100,000 to reserve accounts.

By year five the year-end revenue in excess of expenses is projected at $162,067 resulting in cumulative excess revenues of about $670,000.

It is estimated that the economic impact to the Eau Claire community from events and activities hosted at the Arts Center will be $4,456,261 (without multipliers) from the first year of activity.

To effectively operate the Community Arts Center to ensure that the venue meets its financial, operational and programming goals, a Board of Control comprised of key stakeholders should be created (Confluence Council, LLC).

A professional management company should be hired by the Board of Control to operate the Center. This management company would work directly for the Board of Control and would be held accountable for overall financial and operational performance of the Community Arts Center.

As part of the ownership group of the Community Arts Center, UW-Eau Claire and ECRAC will have priority scheduling and usage of the Arts Center venues.

Ownership of the Community Arts Center would be based on a condominium model, which is a unique structure for arts centers. Based on a concept plan for a 150,000 square foot complex, the ownership structure for the Arts Center will include two distinct condominium unit owners. The State of Wisconsin (UW-Eau Claire) may own 54,000 square feet, a local not-for-profit (a subsidiary of ECRAC) is projected to own approximately 10,000 square feet and an estimated 5,000 square feet is projected to be leased to Visit Eau Claire. That leaves 81,000 square feet, including the performance spaces, gallery, lobbies and other public areas as common areas, to be "owned" by the Condominium Association.

Budget projections for the first full year of operation reflect the following:

Event revenues of $572,270 and facility fee revenues of $144,190.

Operating expenses totaling $1,092,313.

New Market Tax Credit interest and fees of $100,000 annually. This expense would be not be incurred after the initial seven years of operations.

In compiling the report VenuWorks applied a multi-layered approach including site

visits and tours, facility tours, group interviews/meetings, individual interviews, user group surveys and community surveys. A Facility User Questionnaire was employed to assess the needs of potential users of the theatre complex including community arts groups and UW-Eau Claire groups. An on-line community survey was used to gauge the potential for public participation in the events planned for the Arts Center. The community's response to this survey was immediate and very strong with a return of 331 responses.

Respondents to the survey answered questions about their current attendance at cultural and entertainment events in the Eau Claire region and beyond. They also identified events they would most likely attend at a new Community Arts Center:

Concerts - 70.3% would attend three or more times a year including 23.0% who would attend more than six times a year.

Local and Regional Theatrical - 57.2% would attend three or more times a year including 23.2% who would attend more than six times a year.

National Theatrical Performance - 53.8% would attend three or more times a year including 16.5% who would attend more than six times a year.

Community/Civic Events - 48.4% would attend three or more times a year including 13.1% who would attend more than six times a year.

Family Shows - 36.7% would attend three or more times a year including 8.7% who would attend more than six times a year.

MARKET ANALYSIS

Market analysis attendance figures for the Community Arts Center were derived from a survey by the National Endowment for the Arts (NEA) that established a benchmark of 33.4 percent of represented age groups. VenuWorks used the 33.4% attendance percentage to draw potential attendance estimates of the Eau Claire-Menomonie CSA that includes the three counties of Eau Claire, Chippewa and Dunn with a total population of 206,628 residents. When adding the population of the five surrounding counties of Pepin (7,469), Buffalo (13,587), Trempealeau (28,816), Jackson (20,449) and Clark (34,690) another 105,011 people are included for an eight county total of 311,639 residents.

The eight county population currently exceeds 310,000 which would allow for over 103,000 potential patrons by NEA estimates. The community survey indicates the respondents routinely attend multiple events per year with a large segment attending three or more events per year. VenuWorks considered the NEA study results, area demographics, the Eau Claire Community Survey results and historical attendance figures for comparable venues hosting the event types to predict audience attendance. A conservative estimate of 176,400 patrons is anticipated for the first year of operation for the Community Arts Center.

KEY EXCERPTS FROM THE VENUE WORKS REPORT

"The economic impact in the community from the performing arts can be significant. Touring theater, music, and dance companies spend money providing lodging, meals and maintenance for their ongoing operations. Local patrons will return to the venue often to enjoy the wide variety of events planned for the Arts Center. It is anticipated the Arts Center will draw local and regional patrons on a regular basis and even further for certain events. Patrons traveling longer distances from other areas of Wisconsin, eastern Minnesota and northeast Iowa will typically stay in the community utilizing local hotels, shops, restaurants and other community amenities for overnight or weekend stays due to the travel distances involved."

"While decisions related to funding and operation rests with the primary stakeholders, we believe the Eau Claire Community Arts Center can capitalize on the favorable environment for success currently being realized in the Eau Claire region. The development of the Arts Center will provide a state of the art venue for local, regional and national events to be presented. Long term, the development of the Center in the heart of downtown Eau Claire should provide a catalyst for new businesses to locate there and afford current businesses the opportunity to add staff to meet the increased flow of customers."

"Management structures can take many forms. The unique operational model for the Arts Center will offer a wide range of opportunities for programming and collaboration but may also create operational challenges. The primary objective of all parties involved is to ensure that the Arts Center is a viable, sustainable venue. The management entity of the Arts Center must be focused on maximizing programming and minimizing operational costs."

"A creative partnership has been envisioned for the Arts Center combining the strengths of two vibrant organizations, UW-Eau Claire and ECRAC. Through this synergy new events will evolve, current clients will have the opportunity to experience growth in their programs and community members will be drawn to the Center for a wide variety of activity."

ABOUT THE CONFLUENCE PROJECT

The Confluence Project is planned on property commonly referred to as the "Haymarket Site" at the confluence of the Chippewa and Eau Claire rivers in Downtown Eau Claire. The site along Eau Claire Street and Graham Avenue consists of the Farmers Store and Market Square buildings that border the downtown Haymarket parking lot. The Haymarket property is owned by Haymarket Concepts LLC. Haymarket Concepts is a partnership between Commonweal Development Corp., Market & Johnson Inc. and Blugold Real Estate LLC, a subsidiary of the University of Wisconsin-Eau Claire Foundation.

The project includes a community arts center and a mixed-use development consisting of retail/commercial space, parking and university student housing.

As envisioned, the community arts center of approximately 150,000 square feet would serve the Eau Claire Regional Arts Council (ECRAC), community performing and fine arts organizations, and the University of Wisconsin-Eau Claire. Preliminary plans for the community arts center include:

Offices for ECRAC, community arts organizations and select university faculty and staff in the fine and performing arts.

The performance spaces would be designed for maximum flexibility to accommodate a wide array of performances, including major touring Broadway-style productions that currently cannot be effectively staged in any existing venue in Eau Claire. Private promoters would also be engaged to further expand the local entertainment experience.

Current plans for the mixed-use development include: space suitable for restaurants/bars, coffee houses, retail, offices and other commercial uses; a parking structure; and apartment-style university student housing. The university student housing would add about 300-370 residents to the downtown area (no first-year students, and serve as a living-learning community for music, theatre and art students. The mixed-use development, including student housing, would be entirely privately developed and owned.

Consistent with elements in the Eau Claire Downtown Riverfront District Redevelopment Strategy and Vision Plan, the preliminary plans include a public plaza on the site of the Haymarket parking lot currently owned and operated by the City of Eau Claire, a bridge across the Eau Claire River connecting the new plaza to Phoenix Park, expansion of the riverfront trail network along the Eau Claire and Chippewa rivers, and space adjacent to the trails suitable for outdoor dining and various types of public gatherings.

ABOUT VENUWORKS (FROM THEIR WEB PAGE)

VenuWorks provides full management services to theatres, arenas, and convention centers throughout the United States. Beginning with one facility, today we provide management services to over 50 venues across the country. In addition to our facility management services, we also perform feasibility studies, operations audits, and consulting work for clients with existing and prospective public assembly facilities